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Going for multiple shots on goal

As the first part of this series began with the single word, "Viagra," this installment begins by invoking another blockbuster drug: Lipitor. The Pfizer giant, introduced in 1996, quickly eclipsed other cholesterol-lowering medications produced by competitors.

But the world hasn't seen a drug with similar impact, introduced and marketed at a sweet spot in pharmaceutical history. And the industry might not see another.

According to an article that appeared on Forbes' website on November 30, 2011—the day that Lipitor went off patent—a number of disparate factors contributed to Lipitor's success.

"There may never be another drug like it," says Forbes' Matthew Herper. "That's because of fundamental shifts in our understanding of biology, because of demands made by patients, doctors and society on new drugs and because new drugs now have to compete with super-cheap generic versions of every medicine ever invented. Already, eight of 10 prescriptions are for generics, and the drug industry is focusing on higher-priced, specialty products for patients who are not helped by existing options. Good luck creating a new cholesterol drug as potent, safe for most people and widely tested as Lipitor."

To put the vast reach of the drug in perspective, Herper adds that the drug has lowered the cholesterol of tens of millions of people since its launch, and has racked up more money in annual sales than Major League Baseball.

Lipitor launched an era where it seemed that there could one day be a pill for every concern. However, that era brought with it massive advertising buys and equally massive drug scandals where side effects brought down blockbusters such as Vioxx.

The edge of the cliff

Michael Keech, senior vice president in the Global Lifescience Practice at Celerant Consulting, explains that the approaching patent cliff has significantly impacted what he sees as the three stages of drug development.

He says those three phases—discovery, preclinical and clinical development—proscribed drug development until recently. Big moneymakers coming off patent challenge this paradigm and threaten to upend multibillion dollar businesses.

"Between now and perhaps 2015 to 2016, about $170 billion to $200 billion in drugs are due to come off patent," Keech says. "That's forced organizations to think about how to reposition their drugs."

He says, too, that companies are increasingly looking at more than one application for various compounds in the beginning of development, or to take "multiple shots on goal."

"There are a few reasons to repurpose for practical reasons," he adds. "If a drug is already on the market, there is an existing safety profile. If we have that safety and efficacy information on a drug that perhaps did not meet its clinical trial endpoints, we save money because reformulation is still cheaper than starting over."

From a business standpoint, too, shareholders are receptive to the idea that companies are looking back into their own pipelines to bring to market new drugs, or new indications for old drugs. "Shareholders like the idea of the company spending less money in development," Keech says.

The biggest companies, or those with the most foresight and resources, have dedicated business units to just this purpose. Called something akin to a "new indication discovery unit," Keech mentions household names such as Pfizer, Novartis, Bayer, Lilly and GlaxoSmithKline (GSK) as those who devote minds and fund to this purpose.

Generic drugs only stand to gain in this environment.

Given the flurry of acquisitions and mergers in recent years, it's clear that big drug companies have an insatiable appetite for smaller ones.

Keech says that smart companies will begin to implement a proactive business plan 48 to 72 months before a big-grossing drug goes off patent. Clearly, he says, a number of players have taken a deep dive into the generics business within the past several years. He mentions big players such as AstraZeneca, GSK and Sanofi, which are working the generic business and also pursuing joint ventures in increasing numbers. Teva and EndoPharma are also aggressive in this space.

"Companies are seeking to backfill these projected losses in the next four or so years by acquiring smaller companies and novel products," Keech concludes. "All of what you'd consider the top 10 drug companies have a strategy in place that makes them well positioned to weather this with new strategies." He gives the example of Lipitor as a hard-to-replace blockbuster.

What, then, should drug companies be doing to ensure a soft landing?

Keech says the companies should plan for the loss of patent protection years in advance of the actual event. They should, as part of this strategy, work closely with companies that manufacture authorized generic versions of their compounds.

As Pfizer did with Lipitor, the company entrenched itself with marketing and within the hearts and minds of patients to keep as much branded product flowing as possible.

However, with price pressures from current healthcare reform efforts, generics will increasingly become the preferred drugs for prescribers and health insurance plans alike. As the population ages and prescription drug use increased, the pressure for generic versions of blockbuster compounds will continue to increase.

Neither Pfizer nor Roche responded to several requests for interviews for this story.

Keech also says the environment is ripe for companies that have new technologies which might not necessarily involve lab benches and beakers. Great minds in the space are now also meeting at events that have as their focus the discussion of drug repurposing.

Fast-forward technology

Cecelia E. Cauwenberghe of business research and consulting firm Frost & Sullivan said much the same in this space last month—that in the past five years, rapid innovation in the biopharmaceutical space has helped to temper the effects of rising development costs and stagnant product output. Companies always need new projects to fill pipelines and keep investors content, and to pick up the slack when candidates have not met their benchmarks in clinical trials.

The development stakes are high for drug companies. Recently, Targacept announced it will slash almost half of its workforce due to a recent failure of a compound in Phase III trials. The compound, TC-5214, which was being developed in partnership with AstraZeneca, repeatedly failed to prove that it was better than a placebo in treating depression. The Winston-Salem, N.C.-based Targacept has no U.S. Food and Drug Administration (FDA)-approved drugs to its credit yet, but is working with AstraZeneca on a compound targeted to Alzheimer's disease. But for the near-term, that promise doesn't help the 65 people who'll be packing their desks at Targacept.

According to the experts, the new plan of attack must be to maximize technology. And numerous businesses—not merely pharma companies and research organizations—are looking to do just that. On the other hand, as a step forward, the pharma industry is focused on exploring the full potential of a broad spectrum of compounds and pro-drugs at earlier stages—that is, those in preclinical development—with the aim to provide additional opportunities and diminish risk.

As mentioned last month, Translational Life Sciences is working on a crowdsourcing model to develop the blood pressure medicine lisinopril for multiple sclerosis. The model, which was introduced in beta form on Jan. 31, seeks to enlist collaborators to design Phase II trials of this indication. Founder Dr. Tomas Sablinski, a transplant surgeon by training, calls the idea for his company "a Linux of drug development, in a sense."

Biovista, also mentioned last month, is well known in drug development and the repositioning space.

Another interesting opportunity to use existing information in a new way is taking shape at a company known as Cellworks. Founded by experts in software and semiconductors, the company seeks to develop models to mine vast repositories of known information about drugs, protein interactions and genetics to predict what will work in humans.

Cellworks is a private, venture-backed biopharmaceutical therapeutic design and development company based on platform predicting clinical outcomes. The model will offer the pharmaceutical community innovative best-in-class therapies that are substantially de-risked, yet have a dramatically increased probability of success.

Founders Pradeep Fernandes and Taher Abbasi base their work on the notion that it takes an average of 12 years and $1.2 billion for a drug to travel from the research lab to the patient. These astronomical and rising costs are, they say, in part due to the high failure rate inherent in drug discovery—less than 10 percent of drugs that begin preclinical testing ever make it to human testing, they say. From there, the funnel to the patient narrows even further with only one in five drugs that enters human testing achieving approval for treatment.

"Our model takes molecularly targeted therapies and measures their impact on specific diseases," says Fernandes. "We can also theoretically mix and combine doses in computer models."

For new medicines to continue to reach patients, today's drug developers must find new avenues that increase the likelihood a drug will make it from discovery to approval, and in a perfect world, predict clinical outcomes upfront.

The company has a pipeline of preclinical programs targeting autoimmune disorders and epithelial-based tumors. Its lead compound, CWG952, is ready for clinical development for the treatment of rheumatoid arthritis. It also seeks to enter the oncology space in the near future.

Cellworks was founded in 2005 with a novel approach of designing therapies based on technology emulating human physiology and predicting clinical outcomes. In 2009, Cellworks closed a $7.5 million Series A financing. The company has facilities in both California and India.

The company's founders say their strategy was to begin slowly, growing collaborations and broadening and deepening their experience in demonstrating that their algorithms could accurately crunch massive amount of data to spit out likely compounds for success in treatments. Since then, they say they've pursued roughly 40 collaborations with partners both large and small, running a range of academic medical centers and researchers across the country, but will seek a few commercial partnerships on the horizon.

The speed at which their model works is noteworthy, given the notion that traditional drug development can take more than a decade. Some data sets can be processed in less than an hour, rather than months. In the arthritis work the company has done, the founders say that more than a million in-vivo equivalency studies were crunched to produce results in days. They were able to evaluate three drugs not used before in that indication, combined them in sub-therapeutic levels and found success in animal tests. All three drugs were previously FDA-approved.

"We have the building blocks," says Abbasi. "We can now expand these compounds into other areas, with fewer side effects."

Sanford-Burnham Medical Research Institute at Lake Nona in Orlando is also working on the library concept. Using a comprehensive listing of clinically approved drugs that was made available through recent efforts by the National Institutes of Health as a starting point, the organization is creating the Sanford-Burnham Drug Repurposing Collection, which can be leveraged against the group's strengths in stem-cell biology, phenotypic cell-based screening and high-throughput chemical biology.

The library will be made available to local nonprofit research institutions such as the Salk Institute, the Scripps Research Institute, the University of California at San Diego and its affiliated children's hospital, Rady, as a resource to further advance translational medicine for rare diseases.

Dr. Layton Smith, the director of drug discovery at Sanford-Burnham, points out that this private, independent research group is 100-percent focused on basic sciences, not on education or patient care. Smith estimates that the group will have, by summer's end, a library of about 2,000 to 3,000 small molecules and stem cells ready for researchers to use to prove the efficacy of their compounds and move on to FDA approval. Many will have not only FDA approval, but also the nod of European and Japanese authorities.

If a molecule is patented, the group looks for vendors to work with, or synthesizes a version of the molecule themselves to complete the inventory. As with Cellworks, the group promises to compress the time needed to run screens from molecules in the library.

Smith also points out that the setup of the center for pure research for this purpose gives it a "boutique" capability, cutting time and drawing together the technology and talent to make this approach to drug discovery happen. "We hope people get excited about this approach," he says.

Cellworks Sanford-Burnham Research National Institutes of Health Salk Institute Scripps Research Institute University of California at San Diego Rady Children's Hospital